Saz wrote:Don't listen to him man, he is full of shit. Think about it. If all they cared about was using credit responsibly, why would having 0% utilisation (or having a card that you always have paid off on time but simply haven't used recently) decrease your score? There is nothing irrisponsible about that...and yet credit agencies want you to use the card at least some of the time...or use credit you may not actually want or need to use.
You saw it right the first time, trust your instincts on this. Don't listen to spider, the guy quote Bank of America as if they haven't f**k over million of responsible Americans like you.
Well, the other way they get you is more and more services require the use of a credit card [many businesses are using holds for a lot of money on the credit cards as an uncertainty to having to sue a person for losses that can occur in the natural course of said business, and abusing those cases as well]. So, even the people who want to opt out of the game often don't have much of a choice in many cases. A payment history doesn't demonstrate that you are going make your future payments. And a lack of a payment history doesn't demonstrate that you won't make your future payments. Banks honestly just want you to pay them in order to take your money while they turn around and rake in fist over dollar on the credit card interest rate they charge people. And then also the killings they make on mortgages and other types of loans. Other than the first two categories of DEADBEAT [300-549] and UNDESIRED RISK [550-649], credit scores have ZERO to do with the truth about how intelligent your financial decisions are and what level of risk you represent.
It is indeed true that its not possible to predict the future. All they can do is generate and refine the best statistical predictions they can. Which is the point of all of this.
And actually, the scores are very relevant to level of risk. This is trillions of dollars they're playing with, and they are not
dicking around. The goal is to make piles of money, and so they are going to run right up against the bleeding edge of risk they can tolerate in order to maximize their returns. If it had "ZERO" correlation with predicting acceptable risk, they wouldn't be betting those trillions on it.
I mean, would you
? Would you extend the same loan and rate to a guy with a 650 as you would to a guy with an 825? In order to have a 650, the first guy would need to either have little credit history, or have something otherwise negative in his credit history. The second guy probably has a deeper, broader, history without negatives. So why would you claim the scores "have ZERO to do with the truth about how intelligent your financial decisions are and what level of risk you represent"? (Bearing in mind you are stipulating scores of 650 or higher)
Just trying to work through this logic, since of course even minor issues can have immediate and lasting effects on scores.